Symposium on Bubbles

Abstract

The papers in this symposium represent the divergent views of economists on an important issue: the extent to which prices of assets represent "fundamental" values. While the papers in the symposium present different formal definitions of what a bubble is, the basic intuition is straightforward: if the reason that the price is high today is only because investors believe that the selling price will be high tomorrow—when "fundamental" factors do not seem to justify such a price—then a bubble exists.